Guidelines to developing your next Incentive Program

The calendar year is heading for a close and for many companies, that means budget season. Are you among those who find yourself fighting for budget to fund employee programs?

Once upon a time, it was difficult to determine the return on investment for tactics like performance improvement programs or incentive programs. Once thought of as something “nice to have”, incentive programs today are one of very few tactics that have a measurable impact on an organisation and a clear return on investment.

Top performing companies develop their budgets from the bottom up. They are twice as likely to use income-based budgeting: based on general income, employee income or they use a percentage of anticipated incremental sales income to calculate their budgets.

General guidelines for developing your incentive program budget:

Determine whether you will run an Open-Ended Program (everyone who meets the requirements will redeem rewards), or a Closed-Ended program (fixed number of winners)

Define your fixed costs

Establish your ROI measures

If you’re running an Open-Ended program, estimate the “best case” – what if everyone meets their goal?

Determine the reward values based on performance improvement

Work with your incentive provider to set up a cost estimate. One of the best ways to attack this is to run a good/better/best set of scenarios based on participants meeting goals

While Open-Ended programs can be more difficult to budget, they’re often more motivational because everyone who improves their performance according to the rule structure will be rewarded. If you opt for a Closed-Ended program, consider pitting participant against their own previous metrics rather than against each other. When a program is unfair to a particular region or group, your participants may disengage, even while you’re announcing the program. You may need to handicap the program to even the playing field – i.e. implement a biased points value based on region and sales potential

Structuring an incentive program and determining the budget can be tricky. Partner with an Incentive Professional to ensure that your program will be effective and your budget will be accurate!





So you’ve just finished a major marketing strategy – perhaps it was your annual incentive trip for your high performing dealers, or maybe a short, sharp 3 month product push or even a new product launch. Either way, you put a lot of time, energy and money into it and perhaps you should send out a survey.

A very important component of successful Product Management is talking to and learning from customers.

Surveys play a key role in the product manager’s customer feedback toolbox. They are particularly suited for quickly gaining insights from a large group of customers.

Online surveys allow you to gather feedback from customers everywhere. The structured nature of surveys makes them easy to analyse and quantify the feedback.

Surveys are a good product management tool to use when you want to learn more about:

  • Strengths and weaknesses of your products
  • Prioritisation of features
  • The direction you are taking
  • Overall client satisfaction with your product or company

Getting Customers To Respond To Surveys

In order for survey data to be useful for drawing conclusions, it’s important to get sufficient people to respond to your survey. Surveys often suffer from low response rates because:

1. It’s challenging to convince even devoted customers to take the time to fill out surveys. Customers are busy and your request for survey feedback will be low on their list of priorities.

2. Survey length can make or break the success of a survey. You’d like to learn as much as possible from a survey, but customers all have limited time.

The key to getting good response rates for your survey is to express value for their time. This is where survey incentives come in

Using Survey Incentives

The reality is that everyone is busy, and taking time out of their busy schedules is something you have to earn. This is where something as simple as a $20 gift card comes in handy.

You will need to evaluate the survey responses to see if they were real, or rushed through just to get the gift card but based on the uniformity of responses for certain questions that required more thought, you will discover that the great majority of responses will be sincere. The reward simply motivated people to take the time to complete the survey.

Getting a large number of customers to respond to your survey can have a huge impact on what you learn. In addition, select a few key survey respondents as candidates for follow up calls. These respondents are particularly valuable users or users who had particularly interesting feedback. Since you’re relying on these respondents for future feedback, it is especially important to show them your appreciation for their time with a reward.


There is no “I” in M.I.C.E

Ever noticed how the world likes to dumb everything down to one common denominator. The ubiquitous expression “Not a problem” in response to your query as to why your bank statement is out of whack, is certainly a huge problem to the enquirer but the responder hasn’t given a thought as to how the situation should be handled.

So it is with the incentive industry. Meetings, Incentives, Conferences and Events are all bundled into one jumbled mess by hoteliers, DMCs, airlines and any other supplier to the event management/travel industry. My guess is it’s an economy of scale to be able to provide one rep. to cover a multitude of sins. From that formula, you have a series of suppliers who know everything about the square meterage of a ballroom, what menus are available at the drop of a hat for 250 people (banquet or cocktail, sir?) but have no clue as to why anyone would want to choose their product for incentive qualifiers.

And it doesn’t stop there. Travel is not the only motivator that appeals to every target audience. It might be the most popular but it is also the most expensive, laborious, time consuming and, dare I say it,  least profitable of all non-cash rewards.

Where does that leave us? Do as I say – take the I out of MICE

A full service Incentive House is not:

  • A travel agent
  • A sales promotions company
  • An advertising agency
  • An on-line experience provider

A full service Incentive House is just that – an agency able to provide all of the following services relevant to incentive programs:

Incentive Program design, based on a constructive client brief. The program needs to be achievable and above all, affordable. A  budget is essential at this point. No budget – no program. A good Incentive House will work with a client to establish costs vs potential sales and the % spend of GP to finance the program. 

Incentive Program structure: Identifying the target audience; creating a visible and distinguishing appearance; presenting a comprehensive yet attainable set of rules and set clear objectives. Depending on the style of program (sales, non-sales) the correct system of measurement should be implemented. 

Communication: Snail mail, fax, online, mobile apps and social media should all be considered in any strategic plan for an incentive program. Properly planned and executed, this is without doubt the core strength of your program. Without communication your program dies – along with your revenue. You need to stay on top of reporting to the participants. Keep them informed at every step. 

Reward types: Travel is popular, travel is romantic and memorable. Travel is not affordable for everyone.

We need to remember that human nature determines that most people will crawl over cut glass to be given anything they perceive to be free. Rewards = Recognition. A fistful of Bunnings vouchers will make the average worker very happy as will Apple vouchers, Coles Myer vouchers – any gift vouchers are readily accepted and acceptable.

Merchandise is more specific, but depending on who you’re targeting an on-line catalogue can be a huge motivator. And then there was our classic case – one over-qualifier asked if he could convert his points to cash (highly irregular) and pay off his mortgage. The answer had to be Yes – he had achieved his dream through our client’s incentive program.

Reward Delivery: Whatever you’re using as reward, deliver it well. Beat the drum, tell the world how great this person is/these people are for achieving target and for making you money.

A travel Agent can’t do that, a Meeting Planner can’t do that; A conference Organiser can’t do that and neither can an Exhibition Organiser.

A full service Incentive House can.